For those who have been through multiple business cycles, the SEC’s recent focus on financial fraud and accounting irregularities is nothing new. While there have been periods of time during which the SEC focused on financial fraud, there are also intervals when other issues are more prominent, like the most recent financial crisis.
Nevertheless, it appears that the SEC is once again paying increased attention to financial reporting cases. In 2015, the SEC brought enforcement cases against 191 parties (in contrast to 128 parties in 2014), a significant increase over prior years. Simply scanning the list of settled enforcement cases supports SEC Chair White’s recent statement that the SEC “has reinvigorated its investigative and enforcement efforts” in this area, and is closely scrutinizing “the gatekeepers of financial reporting, continuing to hold accountants, auditors, and audit committees accountable under appropriate circumstances.”
